Morphogenesis and stem cell commitment are determined by a complex of soluble inductive factors and extracellular matrix components that interact to initiate and direct the development of virtually every tissue in an animal. While a variety of such factors have been defined and multiple families consistently implicated in differentiating tissues, there is currently no comprehensive understanding of the identity and interplay of the various cytokines/growth factors required for development of any given tissue, the responses that these factors elicit individually or cooperatively, or the sequence of events required for proper patterning. Accordingly, we have developed in vitro systems for producing and purifying the inductive factors that direct metanephric development and for analyzing molecular responses in renal tissues to this induction. Previously, we established a cell line from the ureteric bud epithelium, the renal inductive tissue and precursor for the collecting duct in the adult. These cells grow in a defined medium and secrete a collectable tubule-inducing/inductive activity for metanephric mesenchyme (MM). Two secreted proteins have recently been identified in concentrated medium conditioned by these cells. One of the proteins, leukemia inhibitory factor (LIF), is a complete inductive morphogen, mediating both the early events of nephrogenesis, i.e., condensation of mesenchyme and upregulation of tumor suppressor gene wt1 , as well as late events, i.e., tubulogenesis and glomerulogenesis and upregulation of homeobox gene lim1 and secreted Frizzled-related family member sfrp2 albeit over a delayed 8-day period. A second protein cooperates with LIF and Fgf2 to induce tubule formation in 72 hrs as in vivo, although it can also cause tubules to develop independently of LIF in 6-8 days. All three factors function synergistically to activate Wnt signaling in MM, presumably through their documented ability to upregulate wnt4 expression, a critical event in the process of epithelial conversion. As an extension of this work, we have also characterized events downstream of inductive signaling and specifically those associated with the process of epithelial conversion. For this, we applied differential display techniques to explant cultures of MM treated either with Fgf2, which mediates condensation but little or no tubule formation, or Fgf2 with concentrated bud cell conditioned medium, which induces numerous tubules. Using this approach, we have identified 72 cDNA species, which are specifically regulated in this process, 36 of which are novel. One of the most intriguing genes identified in these studies is melanocyte-specific gene 1 (msg1) , a Smad-coactivating factor. In the metanephros, msg1 is expressed specifically in a very limited population of cells from the MM that are positioned at the tips of the branching ureteric bud, and its expression is lost in vivo with epithelial conversion. Appropriately, it is also down-regulated in our differential display system. Using a TAT-fusion form of the msg1 protein, we have been able to block tubulogenesis in induced explanted MMs. Furthermore, we have detected expression of this gene in blastemal populations of rat nephroblastomas. These tumors caricature normal nephrogenesis with gross expansion of the blastemal cell component, a feature which may reflect an inability of these cells to undergo epithelial conversion. We are currently assessing the role of msg1 as well as inhibitors of Wnt signaling in tumorigenesis. Such factors may be required normally to sustain stem cell populations for further tissue expansion during organogenesis, but when missexpressed following differentiation, may instead behave as oncogenes.